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tv   [untitled]    February 17, 2012 5:30am-6:00am EST

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we have a farm bill that is expiring september 30th.move we can move forward with actually more substantial savings. >> the exact number in the ct ne president's budget, i wasn't ofi by much, is $32.3 billion, real money, that i think makes sense to put into law as soon as possible. >> i would hope, mr. chairman -- >> i think that's the one thingc we agree with him on. the >> -- that this is something that the committee might roll uh our sleeves and do some work up this year providing budget committee leadership. i know you believe in this. the administration beliefs in it. able >> the only thing i would say -d >> we're fighting sort of a can wo juggernaut on the floor but thip is something we ought to be able to set our sights on, deliver some real savings, show that we can work together and do something that will help the ipi american public and actually are
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help more farmers. >> if i may just make one pointh i do think it's important that d as we work together and achieve real deficit reduction, we do it in a balanced way. so it's important to find savings in agriculture, it's important to find savings in health care. it's also important to get revenue. >> thank you. >> this budget has $2.50 of lar spending for every dollar of o revenue. we need to maintain a balanced approach and not cherry pick here and there. >> we have some time constraints. i appreciate it.. obviously we disagree with that number. but mr. calvin. >> thank you, mr. chairman. i know mike left but i want to k certainly associate myself to his remarks.'s a i really do, looking through this budget, i think it's a lace of leadership that's put us on d an unsustainable path, that if enacted would lead to this s eco country's economic demise.that that's why there's little support in the house for this, p
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there's little -- no support for it in the united states senate. and i suspect very little support throughout this country. thankfully there is a lot of ts people in this room and hol throughout the country to make sure this doesn't hold. and you know, i think the budget we've done here is a responsible budget. at least it puts us on a pathway to economic solvency. and i want to congratulate the d chairman and the committee for o the good work we're trying to do to keep this country fiscally i also serve on another other committee so i want to get into some other issues. on the issue of defense acquisitions, i serve on the ao defense house appropriations wh subcommittee with my good friend mr. pull, and obviously we're looking at how to do the acquisitions. as budget requests delays and restructures several acquisitio programs, including the joint strike fighter, the 5r78 my
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ground combat vehicle. and the replacement for the navy's ballistic missile submarine, you're claiming that these delays will save taxpayer money. historically, stretching out to these defense acquisition th programs to those reduce costs s or are you just shifting those costs outside that budget window? >> i'd like to start with your r comment about our economic demise.maybe maybe i'm just more optimistic a about this country but i think a budget that puts people back to work and at the same time puts us on a sustainable path to deficit reduction -- e. >> well, you're claiming my time. i'm optimistic too because i know your budget is not going to see the light of day so we're gf going to move ahead with our ow budget plan which will actually pass the house.will >> as to the dod -- hous >> the question on the department of defense is what i -- >> so on dod, i think it's really important to understand that this is strategy first, budget
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so this is a strategy which is y consistent with what secretary pa net ta, his leadership team and the president all believe ii the right strategied budget follows.t, as the budget, as you know, does s have a 1% decrease in dod. so the secretary is making tough choices. i think you should talk to him ou about specific programs. i think he can't generalize -- a do know a little bit about can contracting and procurement.- i think you can't generalize ont that.cont i think you need to look prograh by program and any specific questions you have i would am a direct to the secretary. nd >> i will be talking to him tomorrow.qu but as you probably well know, being from the private sector and i'm from the private sector myself. when you push off these large p acquisition programs, your costs increase. and there's a th number of stud the cost increase on this is as high as 40% increase on the actual acquisition costs. but that won't show up in the budget numbers because you're
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shifting those numbers beyond us the budget so it's something that we're wio very concerned about. one in additional costs that it puts on these programs, which makes it more difficult to explain to the american public e why we're expending as much money for these particular programs as we are when it's hen unfortunately because of the way we're acquiring these weapon systems. >> i think secretary panetta has a very well thought through plan and i suggest that you put that question to him. >> thank you. plan thank you, mr. chairman.o >> thank you. >> thank you, mr. chairman. thank you for being here and for your testimony. quick question in relation to something that mr. garrett raised the issue of the -- however you characterize it,
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fine tax under the affordable care act.subm you said there were no new taxe in this budget.standa if i'm not mistaken, that final. budget or tax was in existing law prior to this budget being submitted. therefore by the chairman's ownt standards those things that are in existing law you don't get ee credit for or blamed for.tandar the implication that in some wat this budget raised revenue through that vehicle doesn't meet the standard the chairman said. would you agree with that? >> i think it's important in an, this budget there are no impo increases on families earning less than $250,000 and, in factx important tax breaks, including the america opportunity tax credit which is up to $10,000 for tuition credit, tax against tuition, which is important as part of our global hich i competitiveness and ensuring that people can afford to go to college. go so the middle class is -- we need to rebuild and make sure no that we're doing the what's right by the middle class and tt
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this budget does that. >> thank you.heis ism going to get a bill parochial for a second. >> please. >> over the last three years the administration proposed to appeal the lifo accounting method. and i understand that by your calculations that would result o in about $78 billion worth of revenue. obviously that accounting method has been used for a long time o and has been considered a valid accounting method for certain businesses, including one that's near and dear to the heart of 's all kentuckians, the bourbon distilling industry.urbon and the justification for it, is that bourbon has to be aged for quite a long period of i have a fortune 1,000 company y based in my district, brown foreman distilleries which woul, be adversely impacted to the fo tune of several hundred millionu dollars by this change. impa meanwhile, it does about $3.4 mn billion worth of business, abouo half of that is exported.s
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so it is contributing to our helping our trade balance. my question to you is while calculating the impact the change in lifo accounting methods, in terms of the revenue side, has omb calculated the other implications economically of that change, including the possible death of some uding businesses in the country?untry >> right. on the lifo, that disproportionately benefits oil and gas producers who have treau record profits.ryon on there was a lot of game that cai go on through that lifo system.e the treasury secretary is the point person on specifics arounc individual tax policies. so i'll have to defer to geithner on the calculation ande how cost to benefits are
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weighed. >> i appreciate that. i have raised that with as secretary geithner as well.. quick question. when i'm home this weekend and s i'm in costco -- i know mr. cot simpson says people don't care r about this, but if i'm walking through costcoci or kroger or se place, and a citizen says, why should i care whether this is ai deaf set, debt or percentages on gdp, as opposed to nominal numbers. whether it's the $11 trillion here in this calculations or in the republican budget that was t passed last year, the $6 trillion, why does that matter to the average citizen? b >> i think it matters because we need to make sure the sandwich s citizen understands that we're doing what we need to do right g now to bring down the sure unemployment rate and make sure that people are employed and there are plenty of jobs that k we're making the investments to make this a more competitive country. time we're doing it at the same time as we're bringing our deficits down and creating a sustainablea level of debt to gdp so this ons
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maintains our standing in the world as the place to you see it as we mentioned earlier in our current interestr rates and we need to maintain an environment that has both american companies and global in companies investing here. sting >> and that would be the difference between united states and greece? >> absolutely. >> thank you. >> mr. aiken? >> thank you, mr. chairman. just a couple of questions.f you just said a minute ago thise is the budget that puts people e back to work.e boy, it would be nice if that were, in fact, true, but i'm not so sure that i'm sold on that t idea. but i first of all, on a larger context, when you tax small sins business owners in increased taxing them, what the effect of that is going to be is to make . their business less competitive and harder to create jobs. c specifically i wanted to call ia your attention to your tax increases that you've got. my understanding is that under g american energy producers you
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have a repeal of percentage depletion for hard mineral fossil fuels, i.e., coal. r so you're going to repeal a percentage of depletion for coal. to how is that going to effect theo income taxes of a coal company? >> it would increase them. >> increase them. about what amount? >> i don't know. i can follow up with you on fol that. >> you don't really need to.ou i know. okay.ey'r they're paying about a 22% tax, this would double it. what this does is it basically puts coal companies out of business. there are a bunch of mines al that are already closing down. s but this thing here is going to shut down the coal industry. now, i don't understand how shutting the coal industry aloni with some other administrative e policies such as delays permitting and expansion of the streams rule, to make it so yout can't dig under half of the coal in an area makes long wall is a mining just goes out the windowe what you're doing is you're in
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shutting an entire industry dow and this is a key part of -- this budget is a key part of driving the last spike in the coffin of coal.n't fe so how you can say that this ela thing is a budget that puts able people back to work, i just a don't feel like that's a reasonable assertion at all. >> may i respond?po >> yes, you may. >> i think you might be the impa overstating the impact on coal companies but we can continue al that dialogue. we overall on -- >> don't you think double on coal taxes is pretty significant? >> overall -- overall on small businesses, we, the president, has done 17 different tax breaks for small businesses. this budget has further tax breaks for small businesses. it allows small businesses to write off 100% of their investments.they i also gives them a tax credit as they increase their payroll. so the president believes that small business is vital to this economy and the growth of this economy and support small business necessary a very o vigorous way. >> let's see how we're doing that in a vigorous way.ndg first of all, we're increasing death taxes, so that makes it's an that's an increase on the tax of small business pep second of all -- ne >> are you talking about the estate tax?ss are y
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>> estate tax. ou the >> just to respond to that. it's at the '09 level, which has a $7 million exemption. i believe that it impacts less than 0.3 of 1% of estates. >> well, the point of the matte, is you go death taxes and is y capital gains, that's the money that's the seed corn financiallr of people making investments which gets the businesses going. if we have a policy of first of all taxing them more, so this is a budget that's going to tax them more and then we follow gn that up with, of course, all thd other regulations that you're burying them in.he i don't understand how this is going to help. but particularly, i take extremt exception, not only to that -- e not to even mention what you'ret doing to defense and the 10%, tw another 10% cut coming. but this isn't a budget that does anything but puts people back to work, i think this is a budget that's going to a specifically destroy a lot of industry and a lot of jobs.allys i yield back.t of jo >> thank you.
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we're making up some time. >> thank you, mr. chairman. makn when does the budget balance? ta i think that's a great question. and you were put to the test by the ranking member, my friend from new jersey, when he asked a you that question in different ways in different and he claimed that you never answered the question. you know, dante's inferno is a s terrace and we're looking at ito right now.terr the budget that was presented to us, not that long ago, mr. chairman, your budget, your budget, was balanced on the positive in terms of the ced o percentage of gdp in 2063. let me finish, please. 63.
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>> okay, but if you want the accurate -- >> i'm going to get back to you. i always allow you to speak. 2063 -- 50 years. balanced budget. >> that was when the debt was paid off. >> you took, in your budget, and i thought you were courageous to presents one. hear me out.meout. i said that to you once before. you took revenue off the table, oil revenue. no increases. the cbo said we had annual deficits of 3.5 and 4.5% of gdp. so it was estimated that in the budget that you presented, and t please correct me if i'm wrong, to add 62 trillion to the debt before going into balance out. e it's difficult to have a alance five-year budget, let alone a ten-year budget. you don't know what's going to
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happen.dg you don't know the emergency. a of course when you're not payin. for anything it doesn't matter.o but we're paying for things now. we're trying to do i think both parties are trying -- >> would you politely yield? and i'm not trying to -- draw a figure eight if you can.a here's the point. yo this is really tough stuff. >> it is. is >> it's really hard given the tough fiscal situation our country is in to balance it. our so the question is, what path are you putting the country on? what trajectory are you putting the country on? a >> i agree with that. >> ours is you can see balancesl the budget, it takes a long d time. but the key is you're getting the doubt downward and paid of , which is that date you'rethe talking about. the baseline, what this budget does, sends our debt in the stratosphere.he that's the point. >> we have different oint. stratospheres, i understand that. and if we work together, we could perhaps move toward some tangible evidence. these so you can't over simplify these things.
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you can't ask the director out of context. it's a simplification. it doesn't work. it doesn't work. now, as a former member of the transportation and ber infrastructure committee, i ee,i believe that funding for roads,, bridges, buses, trains is an investment in the economy.n the i have never seen an economist say otherwise. they are right once in a while. according to the american society of civil engineers, our infrastructure is graded as d minus. that's no surprise to anybody around the table if president's budget includes $50 billion in up front investments and a $460 billion six-year reauthorization which is 80% increase. this is in contrast with the budget of the transportation committee that's coming up, not today or tomorrow, in the
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future.rrow, headline news. on that topic, we learned yesterday that the congressional budget office found that this legislation leads the highway trust fund $78 billion more in the but i got to take exception to one thing in this budget.on t i have an exception on many.o ec i am supportive of the budget transportation budget in the president's proposal. i got a major problem with the retroactive cab on a municipal bond tax preference. how long are we going to take to minimize and target et municipalities in this country which give very little help froy anybody anywhere until their m town, small or large, goes under? the phase-out could result in un higher borrowing where are they going to get this money?ts. i want you to tell me where ng
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they're going to get the money e for state and local governmentsy to pay the higher rates on what you are suggesting and i think t that this would be a disaster a for municipalities who have had to layoff policemen, fire, cetea teachers, elts, et cetera.s. large and small towns. republican and democratic towns. this is an absurdity.. i would like to know your answer, if i could, mr. dity. chairman.ur go ahead. >> well, i think on a specific n tax policy i will, again, deferi to secretary geithner in terms of the transportation comments. i couldn't agree more. it's actually a $476 billion y a reauthorization, six years. the other thing i would note ish that the president has $30 billion in the budget to make ln sure that teachers and first responders and other key people at the state and local level keep their jobs and are put back in their jobs. so the transportation is a jobs win-win. it puts people back to work and
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helps make us more globally competitive.>> m >> thank you.r. take >> thank you.y at >> mr. chairman, i would ask you to take a look very carefully at this point.of thi we do not know the consequences, of this or understanding, neither party did in the past ten years. i'm asking you to look at it because we are burying our municipalities. >> duly noted. mr. cole? >> i want to agree with my friend.>> i i think you were courageous to offer the budget you did. i think this committee was udgey courageous to pass this i think the house was courageous to pass it.was i'm sorry my friends when they s were in the majority didn't do j budget their last year. that our friends in the senate o haven't done one in 1,000 days and we find precious little fin support for the president's esin budget on his side of the aisle. it is tough to grapple with iso these things. i'm almost reluctant to say i'm happy to see you here.i'm happ every time somebody does that they spend the next 4 1/2 minutes beating you i am happy to see you here. for you will do a good job for the president.n
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you've served him well in previous capacities.le let me put a hypothetical in front of you but i think it's a reasonable hypothetical. ge first, let's just posit you get the revenue uncreases in your budget and they occur as predicted in the budget. and let's just posit for a minute discretionary spending does get better. the we've actually spent less on discretionary side in the appropriations process than theg president asked for the last two budget years. we made budget control act going forward which kind of put a ceiling on that.things c i think we actually on the discretionary side of things caj do even better than the president soer if those two things happen is there any realistic chance of this budget ever balancing absent some sort of serious le entitlement reform? c >> i think the affordable care act resulted in $100 billion in savings in the first decade, a trillion in the second. in this budget, $360 billion off further health care savings furt
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through the efficiency gains, h effectiveness gains they talked about earlier. $270 billion of non-health care mandatory programs. it's an important set of initiatives, policy to get done. >> can it ever balance? >> we need to keep working on dn it.eep we need to keep working to see o how we maintain the compact that we have with our seniors at the same time. kee >> i agree. is it fair to say that means no, that we're going to have to havo some sort of entitlement reform to get further to where we all want -- re >> go back, i'll go back to my private sector experience.glil g sometimes when you face a really big challenge, you keep going at it and you keep making incremental progress.ou and you do it in a way that maintains the compact that we yi have with our seniors. the republican budget breaks that compact. it's asking folks in 2022 to pay 65, $6400 more according to cbo that breaks the basic compact.yo
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>> well, i would with disagree with the >> we keep that compact and keep going after it. the >> what is the president -- reclaiming my time. what is the president's plan p then to deal with this?l >> the plan is to make this akes progress in this budget, enact these policies into law and e to continue to work together to make continued improvements to these programs, to make sure we're maintaining the compact at the same time -->> d >> do you think the president will tell us what the plan is before the next election? >> i think the president on multiple occasion has shown leadership, come to the table in serious discussions and each and every time has been rebuffed. no one is willing to take a balanced approach to deficit reduction. >> when you present a plan, we have a plan on entitlement w reform. e let me ask you another question. you referenced in your initial e remarks that looks like we're making progress on the payroll k tax, and we may well be.yroll we'll probably all have to hold our nose on both sides of the so
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table, accept some things we po don't like. that could potentially happen this week. do you continue in your budget the payroll tax holiday next year or do you assume that we'rh going to return to -- as i thino we should, quite frankly, hopefully the economy is stronger and we can return to i the normal social security taxes and revenues that we used to d project on current taxes. >> it's the tha we're confident that we'll be ie that type of shape economically that we can end the payroll tax holiday. >> you're pretty sure we're going to -- >> yes.ank you >> okay. a very good. thank you very much. last question, we've had a lot of discussion about oco. again, i disagree with you on projecting $850 billion worth of savings.llion wo how do you do that unless you can figure out what we're going to spend if we go to war someplace else.ure out you're taking savings saying we're ending the next ten years is very unpredictable.s. you have no place in there where you would assume that we would d spend money to go to war.end mo
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it's a pretty good chance --neto >> i don't want to speculate on national scene and that spe definitely is for secretary panetta. i will point out that there aret $450 billion in oco still in th4 budget in this situation where e we're saving over $800 billion.t it's not as many oco is going to zero. there's $450 billion. >> thank you very much. appreciate it. i yield back, mr. chairman. >> mr. honda?he >> thank you, mr. chairman. i appreciate it. agree and thank you for your presencet here. the budget is, i think, for the public and i agree with mr. simpson that when we talk in terms of percentage of gdp, people's eye just glaze over because it's just not something. that we talk on a daily basis, it's not a common language outside of the beltway. having said that we've been talking about extending the e
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payroll tax cut and the unemployment insurance benefits% and the information i have is ic we extend the 2% payroll tax cua and the unemployment insurance benefits, that could add about 0.5 percentage points to the economic growth in 2012 and supply between 120,000 and 600,000 jobs. moody's analytics said this, mo' that doing this would add 0.9% s percentage points to economic growth, which is almost double. the nexus between the extendingt of the payroll tax cuts and the job creation, how does that t happen? i mean, you know, how do you create the jobs from the tax cuts? dy what is the economic dynamics that happens in people's motivations and, you know, what is the thinking -- >> >> i'm not a macro economic guro
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by any stretch, but the statistics that you said i thinp are widely accepted statistics.i by ensuring that families have r an extra $40 in their payroll ah each paycheck through the end of the year has great spill-over effect.that they go out and they spend thatt money and that creates >> i t additional jobs. >> it's just that simple?inte >> i think that's the basis of yes, it's a very complex set ofd interrelated issues, but, you know, when people have more ther money in their pocket to spend, they're able to spend it. and they're able to help t to b stimulate the economy and create jobs. now, i want to be clear that the president's plan is not just a payroll tax cut. exte it's extending the unemploymentw as we've talked about, but it's0 also an immediate $50 billion in investment in infrastructure. te it's ensuring that there's money for us to retain first responders. it's to hire veterans and to
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continue to make changes that will help our housing market rebound.- this so there's -- this is a multi-facetted approach. we need that given that we're still at 8.3% unemployment. we need to attack on all fronts and get people back to work. >> so since we've done this for a while now, are there any hard data that we can look at and f say, since we've done this, it't created "x" amount of -- >> i think the most important thing we can look at is qui thankfully over the last severat months the unemployment rate has come in quite a bit. it's not where we want to be ati 8.3% but it's moving in the right gdp growth is moving in the right direction. now is not the time to stop. our now is the time to continue to e make the investments that put people back to work and make oui country more competitive. at the same time, we will be pa putting ourselves on a path to deficit reduction and stabilize our debt which is important for our medium and long term. w >> and there will be a point d n
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where we'll withdraw the tax cuts -- ithdraw >> i was just asked that question, and the plan is that the payroll tax cut be extendedd through the end of the year. it's very important. there are no plans for ugh additional payroll tax holidayse >> does the chamber of commerce or any other organization reflect that same kind of sentiment and data? >> sure. i think there's wide spread belief that the payroll tax holiday helps to create jobs and helps our recovery.recov and if you would like, i can i have our staff follow up with ow some of the specifics on that. >> for the future, maybe we he could find some other ybe terminologies when we talk abouk percentage of gdp, can say which means or something like that. >> we'll work on that. >> this is a way where we can s educate ourselves and educate the general public when they hear terminology -- hen >> i think the main thing is the general public needs to understand that theran


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